COUNTRY SPECIALISATION REPORT

COUNTRY SPECIALISATION REPORT Country: Hungary Date: June 2006 ERAWATCH Network asbl: Project team: NIFU STEP, University of Sussex (SPRU), Joanneum Research, Logotech, FhG-ISI The opinions expressed in this publication are those of the individual authors alone and do not necessarily reflect the position of the European Commission. ERAWATCH is a registered Trade Mark. Reproduction of content is authorised provided the source is acknowledged. European Communities, 2007. Website: http://cordis.europa.eu/erawatch/

Index COUNTRY SPECIALISATION REPORT - HUNGARY...1 Main findings...1 Public R&D statistics...4 GBAORD by socioeconomic objective...4 HERD by field of science...5 Business ENTERPRISE INTRAMURAL EXPENDITURE ON R&D (BERD)...6 Bibliometrics...9 Patents...11 Economic specialisation...12 Correlation analysis...15 Explanatory notes...19 ISIC v3 codes and sector description...19 How to read specialisation profile figures...20

Index of tables and figures Table 1. R&D expenditure by sector of performance and source of funds.hungary. 1993 and 2004. Million Euros. Current prices...3 Table 2. Correlation analysis. indexes BERD, Value added, Employment, Exports and patents. Hungary. Averages 1993-1995 and 2001-2003....15 Table 3: Profile...18 Figure 1. R&D expenditure by performing sector as per cent of GDP (left axis). GDP in million Euros (right axis). Hungary.1993-2003...3 Figure 2. GERD by type of research. Hungary. 1993, 1998 and 2003...3 Figure 3. Government Budget Appropriations or Outlays for R&D (GBAORD) by socio-ecomomic objective. profile. Hungary. 1993 and 2003....4 Figure 4. Expenditure on R&D in the Higher Education Sector (HERD) by field of science. Hungary. 2000, 2002 and 2003. Per cent of total HERD and in million Euros...5 Figure 5. Expenditure on R&D in the Government sector (GOVERD) by field of science. profile. Hungary. 1993, 2000 and 2003....5 Figure 6. Business enterprise intramural expenditure on R&D by industrial sector. 31 sectors. profile. Hungary. Averages 1993-1995 and 2001-2003....6 Figure 7. Shares of Business enterprise intramural expenditure on R&D (BERD) in the sector funded by government. 2003 last available year in OECD statistics...7 Figure 8. Shares of total government funding of Business enterprise intramural expenditure on R&D (BERD) by industrial sectors. 2003 last available year in OECD statistics...8 Figure 9. Number of publications by scientific field. 25 Scientific fields. profile. Hungary. Averages 1993-1995 and 2001-2003...9 Figure 10. Shares of total publications by scientific field. 25 Scientific fields. Hungary. 1993 and 2003....9 Figure 11. Number of citations by scientific field. 25 scientific fields. profile. Hungary. Averages 1993-1995 and 2001-2003. Five years citation window. (i.e. citations to papers published in the period 1989-1991 and in the period 1997-1999...10 Figure 12. Number of patents by industrial sector. 18 sectors in manufacturing. profile. Hungary. Averages 1993-1995 and 2001-2003. Based on correspondence matrix ISI- SPRU-OST....11 Figure 13. Shares of total patens by industrial sector. 18 sectors in manufacturing. Hungary. Averages 1993-1997 and 1999-2003. Based on correspondence matrix ISI-SPRU-OST...11 Figure 14. Value added by industrial sector. 34 sectors. profile. Hungary. Averages 1993-1995 and 2001-2003. Million Euros. Current prices....12

Figure 15. Shares of total value added by industrial sector. 34 sectors. Hungary. 1993 and 2003. Million Euros. Current prices...12 Figure 16. Employment by industrial sector. profile. Hungary. 34 sectors. Averages 1993-1995 and 2001-2003. Numbers engaged hundreds....13 Figure 17. Shares of total employment by industrial sector. 34 sectors. Hungary. 1993 and 2003. Numbers engaged hundreds....13 Figure 18. Exports by industrial sector. profile. Hungary. 34 sectors. Averages 1993-1995 and 2001-2003. Thousand USD. Current prices....14 Figure 19. Shares of total exports by industrial sector. 34 sectors. Hungary. 1993 and 2003. Thousand USD. Current prices...14 Figure 20. BERD versus Value added specialisation in the primary and secondary industrial sectors. Hungary. Based on average values 2001-2003....16 Figure 21. BERD versus Value added in services. indexes. Hungary. Based on average values 2001-2003....16 Figure 22. BERD versus patents. indexes. Hungary. Based on average values 2001-2003....17 Figure 23. BERD versus exports. indexes. Hungary. Based on average values 2001-2003....17

COUNTRY SPECIALISATION REPORT - HUNGARY MAIN FINDINGS Hungary s economy, as expressed by value added and employment specialisations (Figures 14 & 16), appears more directed towards the secondary productive sector and particularly in sectors such as the motor vehicles, electronic and electrical equipment, office machinery, plastics, pharmaceuticals, petroleum, textiles and food industries. In services, the sectors where Hungary is specialised in both benchmarks are the telecommunications and transportation services. Some strong correlation (Table 2) emerge between value added and BERD which stands for both periods under examination (1993-95 & 2001-2003). Exports during the period 1993-95 were also correlated with BERD and value added for both periods. However this relationship does not stand for the 2001-2003 period. Finally, no correlations exist between economic specialisation or BERD with patents. R&D intensity in Hungary (Figure 1) remained constant over the whole 1993 2003 period at 1% of GDP, with significant fluctuations however particularly in the middle of the 1990 s. These fluctuations of the share of GERD in GDP were not so much the result of a reduction in business expenditure on R&D as a share of GDP, but the result of the decline of public research expenditures in HEI s and PRO s. However these negative trends were reversed by 2003. Moreover it appears that the share of goverment as a financing source of research has increased (Table 1), while the private sectors relative share was reduced. BERD however, as a share of GERD increased from 40.6% in 1993 to 43.9% in 2004. One of the main reasons for this rise is the increased funding that Hungarian enteprises received from abroad that was directed mainly to the private sector. When we examine GERD by type of research (Figure 2) we can observe that the share of basic research has remained relative constant at one third of GERD. At the same time the share of applied research was reduced in the benefit of experimental research. As far as HERD by scientific field is concerned, it appears that the distribution of funds is balanced between the various scientific fields with natural sciences, engineering and humanities receiving relatively larger shares of total funding. More profound changes took place in public research centers and particularly with regard to the steep reduction of the share of natural sciences from 59.3% in 1993 to 37.3% in 2003 (Figure 5). In addition, while during 1993 the shares of humanities and social sciences in GOVERD were null, their respective shares during 2003 rose to 10.5% and 13%. An important point of notice, regarding BERD specialisation (Figure 6), is the small number of sectors where Hungary appears specialised for both periods of reference. During 2003, the goverment provided funding for a large number of sectors (Figure 8) for research and development activities, with the largest shares being directed towards business activities, IT services, community services, agriculture, chemicals and the motor vehicles industries. Particularly for manufacturing, the sectors that receive public funding were underspecialised in terms of BERD for the 2001-03 period. Regarding scientific specialisation, Hungary presents a diversified picture with high specialisations in natural sciences such as mathematics, physics and chemistry but also in other scientific fields such as neurosciences, pharmacology, agriculture and computer sciences. 1

(Figure 9). In terms of technological specialisation (Figure 12), Hungary appears underspecialised in most sectors with the exception of pharmaceuticals, chemicals and food. 2

Main R&D figures Total R&D expenditure Figure 1. R&D expenditure by performing sector as per cent of GDP (left axis). GDP in million Euros (right axis). Hungary.1993-2003. 1.2 1.0 0.8 0.6 0.4 0.2 0.0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 BERD GERD GOVERD HERD GDP (m euros) 80000 70000 60000 50000 40000 30000 20000 10000 0 Source : OECD, Main Science and Technology Indicators, November 2005 Table 1. R&D expenditure by sector of performance and source of funds.hungary. 1993 and 2004. Million Euros. Current prices. GOVERD BERD HERD Total 1993 2004 1993 2004 1993 2004 1993 2004 Business 23.5 15.3 85.3 229.3 6.7 22.8 115.5 267.4 Government 52.7 183.7 11.9 12.3 59.5 143.1 124.1 339.1 Non profit 2.8 0.2 1.1 4.1 From Abroad 2.3 10.2 3.4 54.4 2.2 10.0 7.9 74.6 Total 78.4 201.8 100.6 296.2 68.5 177.0 247.5 674.9 Source: OECD OFFBERD 2005 Figure 2. GERD by type of research. Hungary. 1993, 1998 and 2003 100% 90% 80% 70% 67.0 68.2 188.0 60% 50% 86.4 84.3 174.4 40% 30% 20% 10% 0% 73.6 71.4 184.2 1993 1998 2003 Source: OECD OFFBERD 2005 Basic research Applied research Experimental development 3

PUBLIC R&D STATISTICS GBAORD by socioeconomic objective Figure 3. Government Budget Appropriations or Outlays for R&D (GBAORD) by socio-ecomomic objective. profile. Hungary. 1993 and 2003. Not available Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: OECD Basic Science and Technology Statistics 2005, own calculations. 4

HERD by field of science Figure 4. Expenditure on R&D in the Higher Education Sector (HERD) by field of science. Hungary. 2000, 2002 and 2003. Per cent of total HERD and in million Euros. 100% 80% 60% 40% 20% 0% 14.2 34.1 34.6 14.2 31.1 28.3 12.0 19.0 19.4 14.4 23.6 26.1 15.7 30.2 36.8 22.3 39.4 40.2 2000 2002 2003 Natural sciences Engineering Medical sciences Agricultural sciences Social sciences Humanities Source: OECD Basic Science and Technology Statistics 2005. Figure 5. Expenditure on R&D in the Government sector (GOVERD) by field of science. profile. Hungary. 1993, 2000 and 2003. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 6.9 14.9 28.2 11.2 9.6 22.8 6.5 21.3 38.7 5.9 18.9 12.3 27.6 35.9 36.8 81.2 1993 2000 2003 Natural sciences Engineering Medical sciences Agricultural sciences Social sciences Humanities Source: OECD Basic Science and Technology Statistics 2005 5

BUSINESS ENTERPRISE INTRAMURAL EXPENDITURE ON R&D (BERD) Figure 6. Business enterprise intramural expenditure on R&D by industrial sector. 31 sectors. profile. Hungary. Averages 1993-1995 and 2001-2003. Community ser Wood & Publishing Non-met Trade Pharm Agriculture R&D IT services Financ. interm Telecom Transport Construction Furniture & rec Transport nec Air Ships Vehicles Electr. Equip Electrical mach. Office mach Machinery Fabricated met Basic - met Mining Plastics Other Business Water & electr. -100-50 0 50 100 1993-95 2001-03 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: OECD Basic Science and Technology Statistics 20052005, ANBERD 2005, own calculations 6

Figure 7. Shares of Business enterprise intramural expenditure on R&D (BERD) in the sector funded by government. 2003 last available year in OECD statistics. Water & electricity Furniture & recycling Mining Community services Fabricated metal products Construction IT services Non-metallic min Business act & Real Estate Agriculture Office machin. R & D Wood & publishing Basic metals plastic products Telecommunications Machinery nec Motor vehicles Electrical machinery Trade Electronic Equipment Pharmaceuticals 2.5% 2.0% 1.3% 0.4% 10.9% 9.5% 9.4% 9.3% 9.1% 4.3% 17.2% 15.1% 13.1% 24.9% 24.9% 24.4% 24.0% 31.1% 29.8% 28.9% 38.5% 33.8% 33.5% 44.8% 41.4% 48.7% 0% 10% 20% 30% 40% 50% 60% Source:OECD Basic Science and Technology Statistics 2005, own calculations 7

Figure 8. Shares of total government funding of Business enterprise intramural expenditure on R&D (BERD) by industrial sectors. 2003 last available year in OECD statistics. Business act & Real Estate IT services Community services Agriculture Motor vehicles Water & electricity Machinery nec Non-metallic min Electrical machinery Trade R & D Pharmaceuticals Electronic Equipment Fabricated metal products Office machin. plastic products Basic metals Construction Wood & publishing Telecommunications Furniture & recycling Mining Financ. intermediation Transport 10.5% 8.5% 7.7% 6.1% 5.9% 5.6% 4.6% 4.5% 3.9% 3.5% 3.3% 2.8% 2.3% 2.0% 2.0% 1.6% 1.5% 1.3% 1.3% 1.3% 1.2% 1.0% 1.0% 0.7% 0.3% 0.0% 0.0% 0.0% 15.4% 0% 5% 10% 15% 20% Source: OECD Basic Science and Technology Statistics 2005, own calculations 8

BIBLIOMETRICS Figure 9. Number of publications by scientific field. 25 Scientific fields. profile. Hungary. Averages 1993-1995 and 2001-2003. Psychology Plant & Animals Multdisciplinary Materials Sc Microbiology Law Immunology Geosciences Environment Engineering Clinical Medicine Space Sc Agricultural Sc Social Sciences Education Pharmacology Physics Mol Biology & Genetics Economics Computer Science Biology & Biochemistry Neurosciences Mathematics Chemistry -100-50 0 50 100 1993-95 2001-03 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: Thomson ISI, NSIODE 2005, own calculations. Figure 10. Shares of total publications by scientific field. 25 Scientific fields. Hungary. 1993 and 2003. 30% 25% 20% 15% 10% 5% 0% Agricultural Sc Space Sc Biology & Chemistry Clinical Computer Economics Education Engineering Environment Geosciences Immunology Law Mol Biology & Microbiology Materials Sc Mathematics Neurosciences Multdisciplinary Physics Plant & Pharmacology Psychology Social 1993 2003 Source: Thomson ISI, NSIODE 2005. 9

Figure 11. Number of citations by scientific field. 25 scientific fields. profile. Hungary. Averages 1993-1995 and 2001-2003. Five years citation window. (i.e. citations to papers published in the period 1989-1991 and in the period 1997-1999. Psychology Pharmacology Plant & Animals Social Sciences Physics Microbiology Law Immunology Geosciences Environment Mathematics Materials Sc Biology & Biochemistry Agricultural Sc Multdisciplinary Mol Biology & Genetics Engineering Education Economics Clinical Medicine Space Sc Neurosciences Computer Science Chemistry -100-50 0 50 100 1993-95 2001-03 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: Thomson ISI, NSIODE 2005, own calculations. 10

PATENTS Figure 12. Number of patents by industrial sector. 18 sectors in manufacturing. profile. Hungary. Averages 1993-1995 and 2001-2003. Based on correspondence matrix ISI- SPRU-OST. Transport Equip. Fabricated met Office mach Furniture Vehicles Electr. Equip Electrical mach. Machinery Basic - met Pharm Non-met Plastics Wood & Publishing -100-50 0 50 100 1993-95 2001-03 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: European Patent Office 2005, own calculations. Figure 13. Shares of total patens by industrial sector. 18 sectors in manufacturing. Hungary. Averages 1993-1997 and 1999-2003. Based on correspondence matrix ISI-SPRU-OST. 30% 25% 20% 15% 10% 5% 0% Wood & Publishing Pharm Plastics Non-met Basic - met Fabricated met Machinery Office mach Electrical mach. Electr. Equip Vehicles Transport Equip. Furniture 1993-1997 1999-2003 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: European Patent Office 2005, own calculations. 11

ECONOMIC SPECIALISATION Figure 14. Value added by industrial sector. 34 sectors. profile. Hungary. Averages 1993-1995 and 2001-2003. Million Euros. Current prices. Other Business IT services Real estate Hotels Furniture & rec Electr. Equip Electrical mach. Construction Fabricated met Wood & Publishing Telecom Non-met Agriculture Community serv Trade Air Ships R&D Financ. interm Machinery Basic - met Mining Plastics Transport Water & electr. Transport nec Vehicles Office mach Pharm -100-50 0 50 100 1993-95 2001-03 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: OECD, STAN 2005, own calculations. Figure 15. Shares of total value added by industrial sector. 34 sectors. Hungary. 1993 and 2003. Million Euros. Current prices. 30% 25% 20% 15% 10% 5% 0% Agriculture Mining Wood & Publishing Pharm Plastics Non-met Basic - met Fabricated met Machinery Office mach Electrical mach. Electr. Equip Vehicles Ships Air Transport nec Furniture & rec Water & electr. Construction Trade Hotels Transport Telecom Financ. interm Real estate IT services R&D Other Business act Community 1993 2003 Source: OECD, STAN, 2005. 12

Figure 16. Employment by industrial sector. profile. Hungary. 34 sectors. Averages 1993-1995 and 2001-2003. Numbers engaged hundreds. IT services Financ. interm Hotels Vehicles Office mach Trade Fabricated met Telecom Water & electr. Transport nec Electr. Equip Electrical mach. Machinery Non-met Pharm Wood & Publishing Agriculture Community ser Other Business R&D Construction Air Ships Mining Furniture & rec Plastics Real estate Transport Basic - met -100-50 0 50 100 1993-95 2001-03 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: OECD, STAN, 2005, own calculations. Figure 17. Shares of total employment by industrial sector. 34 sectors. Hungary. 1993 and 2003. Numbers engaged hundreds. 30% 25% 20% 15% 10% 5% 0% Agriculture Mining Wood & Pharm Plastics Non-met Basic - met Fabricated Machinery Office Electrical Electr. Vehicles Ships Air Transport Furniture & Water & Constructio Trade Hotels Transport Telecom Financ. Real estate IT services R&D Other Community Source: OECD, STAN, 2005. 1993 2003 13

Figure 18. Exports by industrial sector. profile. Hungary. 34 sectors. Averages 1993-1995 and 2001-2003. Thousand USD. Current prices. Transport nec Furniture Air Ships Vehicles Electr. Equip Electrical mach. Office mach Machinery Fabricated met Basic - met Non-met Plastics Pharm Wood & Publishing Mining Agriculture -100-50 0 50 100 1993-95 2001-03 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: UNIDO, INDSTAT4 2005, ISIC Rev3 and COMTRADE 2005, own calculations. Figure 19. Shares of total exports by industrial sector. 34 sectors. Hungary. 1993 and 2003. Thousand USD. Current prices. 25% 20% 15% 10% 5% 0% Agriculture Mining Wood & Publishing Pharm Plastics Non-met Basic - met Fabricated met Machinery Office mach Electrical mach. Electr. Equip Vehicles Ships Air Transport nec Furniture 1993 2003 Source: UNIDO, INDSTAT4 2005, ISIC Rev3 and COMTRADE 2005, own calculations. 14

CORRELATION ANALYSIS Table 2. Correlation analysis. indexes BERD, Value added, Employment, Exports and patents. Hungary. Averages 1993-1995 and 2001-2003. HU_BERD HU_BERD HU_PAT HU_PAT HU_VA HU_VA HU_EMP HU_EMP HU_EXP HU_EXP 9395 0103 9395 0103 9395 0103 9395 0103 9395 0103 HU_BERD9395 Pearson Correlation 1 Sig. (2-tailed). HU_BERD0103 Pearson Correlation.598** 1 Sig. (2-tailed).000. HU_PAT9395 Pearson Correlation.334.601* 1 Sig. (2-tailed).189.011. HU_PAT0103 Pearson Correlation.292.638**.890** 1 Sig. (2-tailed).255.006.000. HU_VA9395 Pearson Correlation.740**.517**.453.322 1 Sig. (2-tailed).000.002.068.207. HU_VA0103 Pearson Correlation.461**.484**.359.301.620** 1 Sig. (2-tailed).008.005.157.241.000. HU_EMP9395 Pearson Correlation.601**.449**.507*.517*.756**.706** 1 Sig. (2-tailed).000.010.038.034.000.000. HU_EMP0103 Pearson Correlation.304.259.469.263.479**.832**.808** 1 Sig. (2-tailed).091.152.058.308.005.000.000. HU_EXP9395 Pearson Correlation.721**.724**.126.063.700**.542**.582**.377 1 Sig. (2-tailed).000.000.630.810.000.009.004.083. HU_EXP0103 Pearson Correlation -.104.153 -.201 -.275.071.693**.251.708**.146 1 Sig. (2-tailed).646.497.438.286.753.000.261.000.516. ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed). 15

Figure 20. BERD versus Value added specialisation in the primary and secondary industrial sectors. Hungary. Based on average values 2001-2003. 100 Value Added Electr Equipment Electr machinery Agriculture Pharm Office mach 50 Vehicles Plastics Non-met BERD 0 Fabricated -100 met -50 0 50 100 Machinery Wood & Publishing Basic-met Furniture & rec -50 Mining Air Ships -100 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: Own calculations Figure 21. BERD versus Value added in services. indexes. Hungary. Based on average values 2001-2003. 100 Value added 50 Water & electr. Telecom BERD Transport Community services 0 Construction Trade -100-50 0 50 100 R & D Other Business act Financial interm IT services -50-100 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: Own calculations 16

Figure 22. BERD versus patents. indexes. Hungary. Based on average values 2001-2003. 100 Patents Pharmaceuticals 50 BERD Electr Equipment 0-100 Office machinery -50 0 50 100 Motor vehicles Basic metals Machinery nec Fabricated metals Plastics Wood & Publishing Non metallic min -50 Electr machinery -100 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: Own calculations Figure 23. BERD versus exports. indexes. Hungary. Based on average values 2001-2003. 100 Exports Electr Equipment Electr machinery Office mach 50 Motor vehicles Agriculture BERD 0 Plastics -100-50 0 50 100 Fabricated Transport nec Non-met metals Machinery -50 Wood & Publishing Ships Air Basic -met Pharm Mining -100 Notes: index with EU15 as reference. Max specialisation: + 100. Min. specialisation: -100. Source: Own calculations 17

Table 3: Profile Areas of specialisation BERD Patents Increase 75-99; 74; 50-52; Value Added 75-99; 352+359; Employment Exports 45; 352+359; Fast growing sectors >4.9% Stable Losing 60-63; 2423; 23 31; Increase Medium-Low growth sectors =<4.9% Stable 2423; 24ex2423; 15-16 30; 73; 60-63; 2423; 23; 60-63; 2423; 24ex2423; 23; 2423; 23; 64; 40-41; 34; 32; 31; 30; 26; 25; 36-37; 33; 32; 31; 30; 28; 26; 25; 20-22 36-37; 34; 32; 31; 30; Losing 64; 40-41; 27; 25; 01-05 Increase Declining sectors <0 Stable 33; 24ex2423; 15-16; 01-05 17-19 64; 40-41; 29; 27; 15-16; 01-05 17-19 28; 27; 26; 25; 15-16; 01-05 17-19 Losing Red numbers: Decrease specialisation from specialised to non specialised Blue numbers: Increase specialisation from non specialised to specialised 18

EXPLANATORY NOTES ISIC v3 codes and sector description Agriculture 01-05 Mining 10-14 15-16 17-19 Wood & Publishing 20-22 23 excluding pharmaceuticals 24ex2423 Pharmaceuticals 2423 Plastics 25 Non-metal minerals 26 Basic metals 27 Fabricated metals 28 Machinery nec 29 Office machinery 30 Electrical mach. 31 Electr. equip. 32 33 Motor vehicles 34 Ships 351 Air 353 Transport nec 352+359 Furniture & recycling 36-37 Water & electr. 40-41 Construction 45 Trade 50-52 Hotels 55 Transport 60-63 Telecoms 64 Financial intermediation 65-67 IT services 72 R & D 73 Other Business activities 74 Community services 75-99 19

How to read specialisation profile figures Plotting specialisation indexes against each other is a method for visualising differences in specialisation patterns. The most interesting analytical dimension in this report is comparing business enterprise intramural R&D expenditure specialisation patterns with specialisation patterns in value added, employment, exports and technological specialisation (patents). The result of the plots is four distinct specialisation quadrants showing: 1. Sectors with neither specialisation in BERD nor in the other analytical dimension (lower left quadrant) 2. Sectors with a specialisation in BERD and in the other analytical dimension (upper right quadrant) 3. Sectors with a specialisation in BERD but none in the other analytical dimension (lower right quadrant) 4. Sectors that display a specialisation in the other analytical dimension but not in BERD (upper left quadrant) If there is a good match between BERD and, say, value added specialisation patterns we expect to find all sectors either in the lower left or in the upper right quadrant. Sectors in the upper left or in the lower right of the graphs indicate anomalies, that is, specialisation in one dimension and non-specialisation in the other. If there are many sectors in these quadrants the graph indicates lack of correlation between BERD and, say, economic specialisation. BERD and Value Added specialisation an example Sectors with a specialisation in VA but not in BERD Value Added 100 Sectors with both BERD and VA specialisation 50 Vulnerable competitive position? Strengthening the strengths? BERD -100-50 50 100 Sectors with no specialisation in BERD and VA -50 Sectors with a specialisation in BERD but not in VA Neglected sectors? Further decline in the future? Efforts concentrated in niches? Opportunities for catching up? -100 20